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Tuesday 31st January 2023

Staff Costs vs Production

British Engineering wins through to even the field...

A skilled engineer in the UK can cost 12 per hour and an Indian 1.20 per hour on that basis how can we possibly compete??

We at MCS Engineering have achieved this goal and are currently supplying three of its clients with parts made cheaper than in India!

Terry is a machine minder at MCS he manages 3 machines each of which run by computers will each carryout 15 operations on a piece of metal to produce the required items finished and perfect in every way.

In India the competitor has three rows of 15 simple lathes and machine tools each operated member of staff plus a team of staff managing the movement of materials. Each piece of metal in UK is set into the lathe once and the machine does the rest perfectly in India the metal has to be set each and every time increasing the opportunity for error each time.

In short the investment in the latest computerised machines and the skilled operators and programmers to run them gives one person the opportunity to take on 50 Indian workers to produce the same amount of product, so suddenly the ten percent wage bill does not look so attractive.

Taxes, red tape,...etc. does add a cost to British Industry but when these items have be manufactured in India they still have to be transferred back to the UK and the clients premises and what carbon footprint does that leave?

Finally the best prices are obtained for the biggest orders so when one buys eighteen months supply of a part to save another five pence this makes cost savings through JIT difficult and also in a world where specifications change sometimes by the week the chance of been left with redundant stock is every buyer's nightmare.

So the future may not be so bleak for the well equipped flexible manufacturers like us, who still can offer real value for money on quality parts in time scales and volumes that suit the instant demands of our manufacturers.

So next time you are faced with low price competition check all of the variables first including time, risk and storage as well as cost and decide whether it really is the best deal for you.

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